The agency noted that some VASPs facilitate transactions for fraud rings and high-risk gambling sites. The report, published on Monday, noted that such service providers were linked to well-known criminals.

According to the report, an unidentified organization carried out “at least hundreds of millions of dollars” in transactions through criminal operations. These operations are carried out by groups linked to large-scale drug trafficking, human trafficking, cybercrime and child sexual exploitation material.

These transactions also include assets sanctioned by the US Office of Foreign Assets Control (OFAC) and wallets linked to North Korea’s Lazarus Group.

“It is more critical than ever that governments recognize the severity, scale and reach of this truly global threat and prioritize solutions that respond to the rapidly evolving criminal ecosystem in the region,” said Masood Karimipour, UNODC regional representative.

In this context, the agency emphasized the need to further monitor organized crime in casinos, junkets, cyber fraud operations and other businesses linked to fraudulent activities.

He also noted that authorities need to receive better training on online gambling operations and money laundering methods made possible through technologies.

It was stated that cryptocurrencies have become a popular payment method in fraudulent transactions. This was attributed to the ease of fast cross-border transactions, widespread misinformation, and low levels of knowledge about how cryptocurrencies work.

The report also states that such scams give fraudsters an advantage by disrupting cross-border law enforcement cooperation, investigation, case acceptance and asset recovery.

Online fraud, run from nondescript office blocks or casino complexes, has become a major industry in the region. Scammers and victims often come from elsewhere.

According to a previous UNODC report, it is estimated that around 220,000 people work in fraud centers in Cambodia and Myanmar alone. Some people are lured to these countries with the promise of a legitimate job and are forced to work in these jobs unwillingly.

One of the types of scams in the area is the romance scam called “pig slaughter”. After persuading victims to make friends online, scammers trick them into investing in fake platforms.

The report also found that fraudsters are diversifying by adding new methods such as identity impersonation, job or role fraud, asset recovery fraud and targeted confirmation phishing fraud. Additionally, the use of new technologies such as artificial intelligence and deepfakes has also increased.

This report by UNODC reveals the need for stricter legal regulations and cooperation in the fight against fraud in the region. Governments need to take more decisive steps to prevent and punish these crimes.

In particular, the use of cryptocurrencies in fraudulent activities has become a problem that needs to be addressed with international cooperation. The complex nature of fraud makes it difficult to develop solutions and poses serious threats to national security.